Local home sales dropped off in December, but 2018 was still a banner year overall for the city’s realtors, according to the Ottawa Real Estate Board.
OREB members sold 663 residential properties last month compared with 765 in December 2017, a decrease of 13 per cent. A total of 471 homes in the residential class changed hands, down 15.7 per cent from a year earlier, while condo sales fell 6.8 per cent to 192.
But condos were a hot commodity in Ottawa throughout most of 2018, fuelling a surge in transactions that saw local realtors post 17,476 sales last year – a 2.2 per cent increase from 2017 and the city’s highest total since 2009.
OREB’s 2018 president, Ralph Shaw, credited the National Capital Region’s sub-five per cent unemployment rate and relatively affordable market for the resale boom. But he also suggested a lack of residential housing supply tempered what could have been an even busier year.
While residential sales were flat compared with 2017, condo transactions in Ottawa jumped 13.1 per cent to 4,058 units sold over the last 12 months.
“What has come to a head in 2018 is the overall shortage of inventory, which is extreme in certain pockets of the city,” Shaw said in a statement. “While this has caused unit sales to slide in the residential market, it has fuelled the condominium market which has recovered and carried us through much of 2018. We have been predicting this will bode well for new construction in delayed high-rise projects.”
He also said the federal government’s tougher mortgage stress test might have kept some potential buyers from entering the market and boosting sales further, adding it “made move-up buyers less likely to take that step and free up entry-level options, which is an important part of the resale market.”
Average residential resale prices rose 4.7 per cent in December to $453,011, while condos jumped nine per cent to $278,295. For 2018 as a whole, residential properties had an average price tag of $446,661, up about five per cent from a year earlier, while the average cost of a condo edged up 3.2 per cent to $278,316.
The $300,000-to-$449,999 bracket continued to be the most active price range for residential properties, accounting for 45 per cent of all transactions last month, while nearly 56 per cent of condo sales fell within the $175,000-to-$274,999 range.
Shaw said he expects 2019 to be another strong year for local realtors, adding a limited inventory will put “upward pressure” on prices over the next 12 months.
“Buyers do have affordable options in outlying communities if they are willing to commute – or they will simply have to pay more provided they can qualify,” he said. “New builds and purpose-built rental housing could help ease some of the pressure, particularly if builders are able to provide a variety of quality options allowing for more movement in the market.”